What is the Malaysian government’s direction for the palm oil industry?
AMBIA: The government has included Palm Oil in the NKEAs, the National Key Economic Areas. So, that is a very clear objective and a very clear mandate that the government has given and the small holders must follow this. Number 1, we must increase the yield of palm oil because now the yield of palm oil per hectare is quite low, about 18 or even 14 tons per hectare per year. We must increase that to 26 tons per hectare per year and also the extraction rate, which is normally 18% or 19 %, because when small holders sell to the FFB, the Fresh Food Banks, they get paid according to the extraction rate, the OER, or Oil Extraction Rate.
Currently, their OER is 18% or 19% whereas the plantations have 20%, 24%, 25%. In fact, in Indonesia, it’s very high, so we must uplift our OER. Palm oil is a crop that the government has included in the NKEAs because palm oil is a golden crop in terms of the price. I think the price of palm oil will go up because the world’s population will increase by 2020 to about 9 billion people. So a lot of people will consume palm oil. We are very sure the price will go up in the long-term, but we are worried about some troubles in between, but in the long-term it will go up.
The NKEA has placed a very clear path for the palm oil industry. Number one is that we have to isolate our replanting program. All of these very old, non-productive, low yield plants, they must be cut out and be replaced with the new plants. And the government gives the money to develop this. Then, once we’ve isolated replanting, the second one is that the maintenance must be good so that everything will be sustainable. They must be able to produce 26 tons per hectare per year. As it is now, small holders are producing only 18 or 19 tons per hectare per year, but they must increase to 24, 25, 26 tons per hectare per year. This is all very clearly stated in the NKEA by the government. The only thing is that it must be implemented correctly and rightly so that it is effective.
How important is Palm Oil to the livelihoods of small holders?
AMBIA: The small holders comprise about 300,000 living in palm oil areas. Just imagine if they have 5 children. 5 children times 300,000, that’s 1.5 million. So 1.5 million depend on palm oil. So they are worried. This anti palm oil campaign, it is killing our people. 1.5 million really depend on palm oil and palm oil is now our golden crop for the small holders, so we've go to do something. So in the first place we must increase yield, we must educate, and we must transfer palm oil technology to the small holders, even if they have a small area, maybe 5 hectares or 6 hectares. If something is wrong with our industry, the whole 300,000 people will collapse because their source of income and their lives is dependent on palm oil. Palm oil now is the golden crop. In fact, in 1970, our poverty rate was about 50% or 45%. By 2011, because of palm oil, the poverty level reduced to 3.6%. It’s very effective, yet people say palm oil is no good
In what way is technology transfer occurring for small holders?
AMBIA: MPOB (Malaysian Palm Oil Board) is doing research for palm oil and then they produced a lot of research results. This is for the consumers and the small holders. So we've got to transfer technology to them. The transfer of technology to the small holders is a bit difficult because they’re small and dispersed, unlike the estates, where they have 5,000 hectares or 6,000 hectares and professional management, so it’s very easy when all that needs to be done is to instruct the managers. But small holders, they are independent, and it is their land. So, we have to do it in a very systematic way, a very polite way, with effective communication with the small holders.
What are some of the challenges small holders face in selling palm oil?
AMBIA: How do these small holders really sell their palm oil? Here we are talking about the small fields of 5 hectares, or even 8 hectares. How do you really sell? The government agencies must help with the small holders. They must organize this palm oil product from the small holders to really have a strong system. Also, marketing is an issue for a lot of small holders and this makes them susceptible to being cheated.
What are the roles of MPOC (Malaysian Palm Oil Council) and MPOB (Malaysian Palm Oil Board) in correcting anti palm oil campaigns?
AMBIA: In our country, we have the Malaysian Palm Oil Council (MPOC) and also the Malaysian Palm Oil Board (MPOB). The MPOB conducts research on the upstream and the downstream. The result of their research is to be used by the consumers, and the small holders are obviously part of the consumers of the technology. MPOC promotes the palm oil market to the word. However, during the process of palm oil promotion, they really have encountered a lot of problems in promoting palm oil. But the government, through MPOC, spends a lot of money to control the anti-campaign, because everything the anti palm oil campaigns say about palm oil is wrong. They say that palm oil has a lot of trans fats, but really it has a lot of vitamin A, vitamin E, and things like that. Don’t tell me the scientists do not know about that. They are scientists and they know better. They should really do some research that is right. But maybe the NGOs are telling the world that palm oil is no good and some even try to label “no Palm Oil”.
In your opinion, what are some of the misunderstandings about the palm oil industry?
AMBIA: Some of the NGOs and the protesters simply do not know about palm oil. Everywhere they go, they can read about palm oil. So, in this case, we’ve got to convince them. We have to have our system and we have to strategize our meeting with them and explain very effectively. For example, MPOC, I remember they called a few MPs from Europe and I attended the discussion and was telling them that they were making our people suffer, the 1.5 million. So, they admit that they do not know much about palm oil. So we've got to educate these people just like we have to educate our small holders. I think MPOC has covered a lot of these areas, especially in terms of technical areas and defining what palm oil is about. Does it contain something no good or does it contain something good? That has been explained and I think MPOC has done that successfully. The only thing is the perception of the people who have been charging the anti-palm oil campaigns. It can be very difficult to change. To us it’s attitude.
What is Malaysia doing to develop the competitiveness of small holders in palm oil?
AMBIA: What is our approach of development? What is our approach of developing small and disperse palm oil fields? Formerly, our approach of development of palm oil fields was done individually, so that we didn't reach economies of scale. Now, we do this in groups. We group the small plots together, 5 hectares here, 5 hectares there, and collectively, they become an estate of over 100 hectares. So there’s an estate that belongs to several managers. We call this Cluster Management. This too affects marketing. You cannot sell individual product of your own. So, who is going to organize this? These are the government agencies. They organize people, they organize land, and they organize marketing. MPOB has a group of people doing this called TUNAS, but they need to be strengthened with more staff. They are very informed about palm oil and they are very intelligent and skilled and they have very positive attitudes. That is TUNAS. They are very important.